2010 Food Crisis

Crisis, never really cared for the term or idea, a Crisis is lack of life boats while the Titanic was sinking, a Crisis is running out of water in the middle of the Sahara.

That said, there is a confluence of events concerning the upcoming Food Market around the globe, mainly Argentina is suffering a drought and their Grain harvest will be far below what the world markets expected, add in a unusually cold winter in the US and an increasing hungry China and  perhaps Writer Decarbonel is onto something:

Food Crisis of 2010

"...The same USDA that is predicting record harvests is also declaring disaster areas across half the Midwest because of catastrophic crop losses! To eliminate any doubt that this might be an innocent mistake, the USDA is even predicting record soybean harvests in the same states (Oklahoma, Louisiana, Arkansas, and Alabama) where it has declared virtually all counties to have experienced 30 percent production losses. It isn’t rocket scientist to realize something is horribly wrong.

USDA motivated by fear of higher food prices

The USDA is terrorized by the implications of higher food prices for the US economy, most likely because it knows the immediate consequence of sharply higher food will be the collapse of the US Treasury market and the dollar, as desperate governments and central banks dump their foreign reserves to appreciate their currencies and lower the cost of food imports. Fictitious USDA estimates should be seen as proof of the dire threat posed by higher food prices, as the USDA would not have turned its production estimates into a grotesque mockery of reality if it didn't believe the alternative to be apocalyptic....."

Decarbonnel also makes a great point here:

"..With one out of eight Americans on food stamps, foreign central banks are subsidizing US food consumption by funding the US government with their treasury purchases. Once the food crisis begins next year, they will be faced with the choice:

1) Continue subsidizing US food consumptions as triple digit food inflation ravages their economy and their people starve.
2) Dump their treasury holdings onto the market to rapidly appreciate their currencies, lowering the cost of food imports and preventing widespread domestic starvation...."

Hmm, I've been around a bit and have seen such predictions before, however 18% of adult workers in the US are on foodstamps including 1.1 million in Tennessee alone, so basically foreign banks are indeed paying, via buying Treasury instrument, to feed the masses in the US.

I have little doubt that the USDA is lying via statistics concerning Harvests in counties that have suffered 30% losses or greater in one crop, however the possibility also exists that additional crops were planted or different crops were planted which would magnify losses in any one crop.

Be that as it may, things are fuzzy, if one steps back and looks at the big picture, food prices are bound to rise in  2010 even more than they have since the Alpha Strategy was published, the only thing that can be said with this information is:

1. The Alpha Strategy is more valid than in the past

2. Something is cooking in the world food markets, though futures prices have not reflected that reality as of yet.

3. With Monetization by the Federal Reserve, including but not limited to purchasing Treasuries not sold at auction, and perhaps engaging in Stock Manipulation coupled with the possibility that there will be a Food Shortage means it is a good time to purchase those food items that will store the longest as well as being the most likely to rise in cost during 2010. 

Things like Canned Tuna for example, have risen 30% in prices since 2009, Rice would also be a safe bet (if one likes Rice),  I also think Coffee and Chocolate will have surprising rises in prices.

The thing about coffee is, it is the #2 Commodity traded in the world in terms of cash volume, as the dollar weakens the prices will rise..